Principles of Marketing

Global Edition
Kotler and Armstrong

Chapter 3:

Analyzing the Marketing

Environment

By:
Ms. Aisha Aziz
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Analyzing the Marketing Environment

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 A Company’s Marketing Environment

The marketing environment includes the actors

and forces outside marketing that affect marketing
management’s ability to build and maintain
successful relationships with target customers.

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 A Company’s Marketing Environment

Microenvironment consists of the actors close to

the company that affect its ability to serve its
customers—the company, suppliers, marketing
intermediaries, customer markets, competitors,
and publics.

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 A Company’s Marketing Environment

Macroenvironment consists of the larger societal

forces that affect the microenvironment—
demographic, economic, natural, technological,
political, and cultural forces.

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 The Microenvironment

Actors in the Microenvironment

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 The Microenvironment

The Company
In designing marketing plans, marketing management takes
other company groups into account.

• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting

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 The Microenvironment
Suppliers

• Provide the resources to produce goods and services

• Treat as partners to provide customer value

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 The Microenvironment
Marketing Intermediaries

• Marketing intermediaries
are firms that help the
company to promote,
sell, and distribute its
goods to final buyers.

Partnering with intermediaries: Coca-Cola provides its retail

partners with much more than just soft drinks. It also pledges
powerful marketing support.

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 The Microenvironment
Marketing Intermediaries

Physical
Resellers distributio
n firms

Marketin
g services Financial
agencies intermediarie
s
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 The Microenvironment
Competitors

• Firms must gain strategic advantage by

positioning their offerings strongly against
competitors’ offerings in the minds of consumers.

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 The Microenvironment
Publics
• Any group that has an actual or potential interest in or
impact on an organization’s ability to achieve its objectives:

• Financial publics
• Media publics
• Government publics
• Citizen-action publics
• Local publics
• General public
• Internal publics

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The Microenvironment
Customers
• Consumer markets
• Business markets
• Reseller markets
• Government markets
• International markets

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The Macroenvironment

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 The Macroenvironment
Demographic Environment
• Demography is the study of human populations-- size,
density, location, age, gender, race, occupation, and other
statistics.

• Demographic environment involves people, and people

make up markets.

• Demographic trends include changing age and family

structures, geographic population shifts, educational
characteristics, and population diversity.

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 The Macroenvironment

Demographic Environment
• Baby Boomers - born 1946 to 1964
• Generation X - born between 1965 and 1976
• Millennials- born between 1977 and 2000
• Generation Z – born after 2000

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The Company’s Macroenvironment
Demographic Environment

Generational marketing is important in

segmenting people by lifestyle or life stage
instead of age.

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 The Company’s Macroenvironment
Demographic Environment

Markets are becoming more

diverse.
• International
• National
• Diversity also includes:
• Ethnicity
• Disabled

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 The Company’s Macroenvironment
Economic Environment
The economic environment consists of factors that affect
consumer purchasing power and spending patterns.

• Industrial economies are richer markets.

• Subsistence economies consume most of their own

agriculture and industrial output.

• Developing economies also offer outstanding marketing

opportunities.

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 The Company’s Macroenvironment
Economic Environment

Changes in Consumer Spending

Value marketing involves offering financially cautious

buyers greater value—the right combination of quality
and service at a fair price.

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 The Macroenvironment
Income Distribution

Over the past several decades, the rich have grown

richer, the middle class has shrunk, and the poor
have remained poor.

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 The Macroenvironment
The Natural Environment
The natural environment is the physical
environment and the natural resources that are
needed as inputs by marketers or that are affected
by marketing activities.

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 The Macroenvironment
Natural Environment

Trends in the Natural Environment

• Growing shortages of raw materials
• Increased pollution
• Increased government intervention
• Developing strategies that support environmental sustainability

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The Company’s Macroenvironment
Natural Environment

Environmental
sustainability
involves developing
strategies and
practices that create
a world economy
that the planet can
support indefinitely.

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 The Company’s Macroenvironment
Technological Environment

• Most dramatic
force in changing
the marketplace
• New products,
opportunities
• Concern for the
safety of new
products

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 The Company’s Macroenvironment
Political and Social Environment

Legislation regulating business is intended to protect

• companies from each other
• consumers from unfair business practices
• the interests of society against unrestrained business
behavior

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 The Macroenvironment
Political and Social Environment
• Increased
emphasis on
ethics

• Socially
responsible
behavior
Warby Parker; Photographer: Esther Havens

• Cause-related
marketing
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 The Macroenvironment
Cultural Environment

The cultural environment consists of

institutions and other forces that affect a
society’s basic values, perceptions, and
behaviors.

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 The Company’s Macroenvironment
Cultural Environment

The Persistence of Cultural Values

Core beliefs and values are persistent and are passed on
from parents to children and are reinforced by schools,
churches, businesses, and government.

Secondary beliefs and values are more open to change

and
include people’s views of themselves, others, organizations,
society, nature, and the universe.

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 The Macroenvironment
Cultural Environment

Shifts in Secondary Cultural Values of People’s Views

Themselves
Others
Organizations
Society
Nature
Universe

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Responding to the Marketing Environment

Views on Responding

Uncontrollable Proactive Reactive

• React and • Take • Watch and
adapt to aggressive react to forces
forces in the actions to in the
environmen affect forces environment
t in the
environmen
t

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